The EU says our contributions total £14.7 billion, the ONS says they are £17.5
billion - but it could be even more, says Alasdair Palmer.

How much does the EU cost the taxpayer? We all know it costs us a lot, and that the amount keeps going up. But exactly how much of our hard-earned dosh does each of us fork out every year to retain Britain’s status as a full and proper member of the EU?

The short answer seems to be: no one knows. This is not because no one has tried to calculate it. Lots of people have, but they have all, or nearly all, come back with different answers – sometimes wildly different. The estimates vary, from £300 a year for each of us (according to last week’s newspapers), to more than three times that figure.

One reason why there is so much disagreement is that the Government does not produce a single, unambiguous figure for the size of our contribution. The European Commission states that Britain paid £14.7 billion into the EU’s coffers in 2009 (if you subtract the rebates we receive, the figure is just over £10 billion). That £14.7 billion is the amount that appears in the Treasury’s Pink Book – the report, prepared by the Office for National Statistics, that logs Britain’s monetary transactions with foreign countries. But it doesn’t appear as our total contribution to EU institutions – that is recorded at £17.5 billion.

Assuming that the Pink Book is right, our contribution is more than 20 per cent larger than is normally thought.

If the Prime Minister announced tomorrow that he had agreed to pay 20 per cent more every year to the EU, there would be an outcry – not least because, when spending on public services is being cut to the bone, £3 billion will buy a lot of schools and hospitals, and still more public libraries. It would even pay about a month’s interest on our colossal national debt.

This is not an amount the Government can afford simply to “lose” by accident, in the process of doing the accounts. Someone must understand where that £3 billion goes, and why it is being paid. So who does, and what’s their answer?

Well, Austin Mitchell, a Labour MP, asked precisely that question a couple of weeks ago of Nick Hurd, a Cabinet Office minister. Mr Hurd didn’t know, and said it was a matter for the UK Statistics Authority. He then produced a letter from Stephen Penneck, head of the Office for National Statistics. This did not answer the question, either.

In fact, it did not answer anything, because it was unintelligible. In so far as Mr Penneck said anything that any normal human had a chance of understanding, it was that the discrepancy was down to different methods of accounting.

Is it credible to claim that differences in the way the UK Statistics Authority does its accounts can explain away those extra billions?

No. That might lead to a discrepancy of a few million pounds. But £3 billion? Perhaps Mr Penneck does actually understand what is going on, but can’t explain it in terms that the rest of us can make sense of. Or perhaps it’s as much of a mystery to him as it is to everyone else.

Perhaps the awful truth is that no one understands why we are paying that amount. With the exception of the famous episode where Mrs Thatcher managed to negotiate a rebate by banging the table, the history of our financial relations with the EU has consisted in agreeing to hand over ever larger sums without complaint. It does not inspire confidence that ministers and officials are keeping a watchful eye on exactly what we contribute and why.

It can be said with some degree of certainty that we are about to pay significantly more to “EU institutions”, essentially in order to prevent the euro from breaking up, by bailing out Portugal, and possibly Spain. Even though we’re not in the euro, while we’re part of the EU, we don’t have a choice about whether to contribute, or even about how much. We just have to hand over the dosh.

Let’s just hope that when we do, ministers don’t accidentally hand over a few billion pounds extra.